Consumers pay the price of interchange changes
The credit union movement’s relentless opposition to any inclusion of interchange amendments in the National Defense Authorization Act (NDAA) was loud and clear in a letter sent to House Rules Committee Monday. As the Committee began meeting yesterday to consider what amendments to make in order to the NDAA, America’s Credit Unions President/CEO Jim Nussle urged opposition against any effort to include language from the Credit Card Competition Act, also known as the interchange “Big Box Bailout” bill, previously introduced by Sens. Dick Durbin, D-Ill., and Roger Marshall, R-Kan. He also urged opposition to another concerning potential amendment would require a study on credit and debit card interchange fees at commissaries and base retail facilities.
Nussle warned that extending debit routing requirements to credit cards would act as a “backdoor price control” that threatens consumer protections, card rewards, and credit availability. He pointed out the disastrous fallout of the Durbin Amendment—which imposed a cap on debit interchange fees—ultimately forced many institutions to scale back services.
“While the intent of the Durbin Amendment was to prevent card-issuers and networks from unfairly charging merchants higher rates and thus passing higher costs along to consumers, the evidence overwhelmingly suggests that it has not helped everyday Americans,” wrote Nussle.
“As consumers are struggling to afford the cost of basic goods and services due to surging inflation, big box retailers should not be considering ways to put consumer spending at risk by interfering with the efficient way credit cards work today,” added Nussle.
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